How Kevin Systrom Chucked His Check-in App, Launched Instagram, And Landed Serious Facebook Cash

Because, as the saying goes: If you can't beat 'em, build something they'll buy for $1 billion.

Months after Kevin Systrom founded check-in app Burbn, he learned Facebook was planning to launch a similar service. And it wasn’t the only one. In quick succession Foursquare, SCVNGR, and Yelp had also begun to offer apps that let users keep their friends updated on their whereabouts. That didn’t bode well for Burbn, which was “not cool enough to stand out above the rest.”

So Systrom turned the product inside out, focusing on photo sharing, which had been a secondary feature, and making location tracking optional. “We realized the check-in part was a little complicated, but people loved the photo part,” said Systrom. “So we did what any entrepreneur would do, and we threw out everything that wasn’t working and kept what worked.”

A month after relaunching as Instagram they had 1 million users. A year later, the company had more than 10 million. Less than two years later, Facebook, its one-time competitor, offered to buy it for about $1 billion in cash and shares. The Federal Trade Commission approved the deal last week.

And Instagram, which attracted its 80 millionth user in July, still has room to grow, says Systrom. “What you’ll eventually end up seeing is that this entertainment platform evolves into something very large to hundreds of millions of users."

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